Abu Dhabi, UAESaturday 25 May 2019

The 180-year-old Swiss watch maker Patek Philippe may come up for sale

The company could fetch as much as €9bn in valuation, analysts say

An exhibitor shows a watch by Patek Philippe for King Farouk of Egypt during Christie's exhibition in Dubai. The watch maker may come up for sale. EPA
An exhibitor shows a watch by Patek Philippe for King Farouk of Egypt during Christie's exhibition in Dubai. The watch maker may come up for sale. EPA

Patek Philippe, the closely held maker of $10,000-plus (Dh36,700) Calatrava watches, may be coming up for sale, according to analysts at Berenberg who cited industry talk.

The 180-year-old Swiss watchmaker could fetch €7 billion (Dh29.2bn) to €9bn, analysts led by Zuzanna Pusz wrote in a note. Patek Philippe has been owned by the Stern family for almost a century, and Thierry Stern became the company’s chairman in 2009.

“It was interesting to hear in the corridors of the Geneva watch salon that a potential sale of the high-end watch brand Patek Philippe could be approaching soon,” the analysts wrote, noting that it could be just a rumor.

A Patek spokeswoman declined to comment except to say deal speculation tends to occur during the annual watch fairs in Switzerland, including last week’s Geneva show. A sale of Patek Philippe would upend the watch industry and could lead to a bidding war, as it’s one of the last prize assets that hasn’t fallen into the hands of a luxury conglomerate.

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Swatch Group, which has bought up brands including Omega, and Richemont, which owns Cartier, make more than half of Swiss watches.

Patek Philippe has sales of 1.5bn Swiss francs (Dh5.52bn), according to Berenberg estimates. On its website, the company says its “intention is to independently pursue the path that led to its success.”

“We understand that one of the largest conglomerates in the sector would likely be interested in the asset given its currently relatively low exposure to the watch category,” the analysts wrote. Ms Pusz wasn’t immediately available to comment further.

Two years ago, family-owned Breitling was sold to private-equity owners CVC Capital Partners for more than €800 million.

In 2014, Stern told Swiss newspaper Le Temps that the company may eventually need to leave Geneva or put itself up for sale if its tax burden wasn’t reduced. Months later, the company announced a 450m-franc investment plan in the canton.

Mr Stern’s wife, Sandrine, works in design at Patek Philippe. Their children are in their teens, and Patek’s chairman has said he wouldn’t push them into the business if they didn’t want to join.

Updated: January 21, 2019 03:44 PM

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